ok, i guess i'll be the board goon and ask the obvious: what the hell happened today?
fwiw, this came out last week.
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CacheFlow Files to Raise $50 Million in Initial Stock Sale
9/30/99 1:28:00 PM
Source: Bloomberg News
Washington, Sept. 30 (Bloomberg) -- CacheFlow Inc., a provider of network devices used to speed the delivery of online information, plans to hold an initial stock sale that could raise as much as $50 million.
The company, based in Sunnyvale, California, specializes in caching appliances, devices that reduce the time and cost of retrieving data from the Internet by storing frequently used information closer to users. That also frees up existing computer servers that run Web sites.
"This is a fast-growing market," said Mark Kelleher, an analyst at Boston-based SunTrust Equitable Securities. "Data is much faster to get."
For the past two years, CacheFlow and other companies have sought to establish a presence in the growing market for caching appliances. The annual market for the devices is estimated to reach more than $1 billion in 2003 from about $92 million in 1999, according to forecasts by Gartner Group Inc. cited in the filing.
The stock sale is part of CacheFlow's plan to obtain funding as it seeks to find new customers. The company said it would use proceeds from the stock sale for general corporate purposes, including working capital and possible acquisitions. Some money may be used to repay debt.
CacheFlow filed with the Securities and Exchange Commission to sell common shares. The number of shares to be sold and their estimated price range will be disclosed in a future filing. The $50 million top value was used solely to calculate a filing fee.
Competition
Network Appliance Inc. and Inktomi Corp. are current leaders in the market for caching appliances, said Kelleher. CacheFlow intends to compete by building brand awareness and developing relationships with more systems integrators, resellers and manufacturers.
Formed in 1996, CacheFlow sold its first products in May of last year. At the end of August 1999, the company had about 100 customers, including Delta Air Lines Inc., Time Warner Inc.'s Road Runner and Global One Communications Inc.
Delta bought CacheFlow's caching appliances in order to ensure that its Web sites were accessible even at peak times, such as during special travel promotions. About 92 percent of requests for information from Delta sites are now being served by CacheFlow's products, the filing said.
CacheFlow net losses rose to $6 million in the three months ended July 31, 1999, compared with net losses of $2.4 million in the same period one year earlier. Net sales rose to $3.6 million compared with $809,000.
IPO Markets
Investors have been clamoring for shares in companies that make the equipment that runs the Internet, betting that businesses and Internet service providers will spend more to handling rising volumes of traffic.
Shares of Internet equipment makers Alteon WebSystems Inc. and Foundry Networks Inc. have more than quadrupled since their first day of trading. Alteon, which on Friday went public by selling shares for $19 apiece, today rose 16 7/8 to 94. Foundry shares fell 4 to 126. Foundry went public on Tuesday by selling shares for $25 apiece.
The filing also comes as companies increasingly focus on specialized network appliances designed for specific tasks instead of more costly general purpose equipment. The concept, which Network Appliance says it pioneered, has been taken up firms such as Mountain View, California-based Cobalt Networks Inc. The provider of server appliances earlier this month filed to go public.
Brian NeSmith, 37, is CacheFlow chief executive. He was previously vice president of Nokia IP Inc., a security router company. He holds a 7.2 percent stake in CacheFlow before the IPO.
Michael Malcolm, 54, is CacheFlow chairman. Until December, he also served as CacheFlow president and CEO. Malcolm is the company's largest shareholder, with an 18.7 percent stake before the IPO.
Other investors include affiliates of Benchmark Capital, who hold a 17.2 percent company stake, and affiliates of U.S. Venture Partners, who hold an 11.2 percent stake.
Underwriters for the stock sale will include Morgan Stanley Dean Witter, Credit Suisse First Boston and Dain Rauscher Wessels. CacheFlow will seek to trade on the Nasdaq Stock Market under the symbol "CFLO." |
